Insurer may not replace brokers with its own employees in letters to customers

In correspondence with policyholders, an insurer may not enter after “Your advisor:” an advisor of its own sales division if the policyholder has concluded a brokerage agreement with an insurance broker and this broker has presented the insurer with a corresponding power of attorney. The claimant, an insurance broker, is entitled to, in the view of Higher Regional Court Nuremberg, the injunction application against the insurer from sections 8, 3 and 5 German Act against Unfair Competition. This is because naming an employee of the defendant as an “advisor” to the policyholder is misleading according to section 5 subsection 1 sentence 2 no. 1 German Unfair Competition Act and therefore unfair. In the view of Higher Regional Court Nuremberg it is a potentially deceptive statement about the key characteristics of the service. These include all subsequent services and thus also information about who advises a policyholder. This is because a misconception by the policyholder can lead to him/her not contacting the correct advisor when requiring specific advice and as a result conducting transactions which he/she would not otherwise have conducted. The panel’s view is that while possibly many policyholders can distinguish between a sales employee deployed by an insurance company from within its ranks, and an insurance broker on the policyholder’s side, a large proportion of policyholders are legal laymen who do not understand this difference.

In the panel’s view, the defendant could not invoke its legal duty to give advice according to section 6 subsection 4 German Insurance Contract Act either. According to section 6 subsection 4 sentence 1  German Insurance Contract Act, the insurer is subject to the legal duty to give advice during the term of the insurance contract, as far as the insurer can see a reason for a query and advice for the policyholders. However, there is an exception to this in section 6 subsection 6 German Insurance Contract Act when the contract with the policyholder – as here – was arranged by an insurance broker.